The conversation between Schmidt and Donahoe preceded another tech story that has attracted headlines. In a long-anticipated move, on 20 October the US Department of Justice (DoJ) launched what The Economist called “the biggest antitrust suit in two decades” against Google. The DoJ claims that the tech giant employs anti-competitive measures to maintain a monopoly for its famous search engine and related advertising.
Google, and its parent Alphabet, allegedly operate “an unlawful web of exclusionary and interlocking business agreements that shut out competitors” reports the Wall Street Journal. The billions of dollars derived from advertisements on its platform are used to pay mobile phone manufacturers, carriers and browsers such as Apple’s Safari to reinforce this monopoly and deprive consumers of choice. While the DoJ has yet to suggest a remedy, it is likely to involve a restructure of the business. “Don’t hold your breath, though: Google dismisses the suit as nonsense, so the case could drag on for years,” adds The Economist in its 22 October leader.
In Wired magazine, Steven Levy compares the DoJ’s action with its tussle back in 1998 with Microsoft, which accused Bill Gates’s group of similarly being over-dominant. “The DoJ won the suit, although it failed to break up the company as it had hoped,” he notes in an article published 20 October. “But it did hobble the Redmond, Washington giant in its efforts to dominate the world.”
Levy isn’t convinced that the case against Google is as strong. “In the former case, the Department uncovered a vast trove of emails affirming Microsoft’s bullying behaviour, particularly in extorting computer companies to use its browser,” he notes. “In the current charges, the closest Google comes to bullying is the way it uses its search engine to allegedly boost its own products.”
Nor does Google have the “arrogant equivalent” to Bill Gates, says Levy. Its former CEO, Larry Page “has dropped off the map” while current leader, Sundar Pichai “has mastered a deferential demeanor under oath”. And while Google evidently dominates search engines, in 2020 no one company rules technology. Instead, there is a cluster – including Microsoft.
Assuming Google decides to employ all its legal resources, Levy agrees that a lengthy struggle is in prospect. But there is the other option of a relatively speedy settlement as “the DoJ’s main complaints are relatively easily addressed” by Google. The US election result could also change things as “we have no idea whether a Joe Biden DoJ would drop this investigation, continue it, or even double down on it and conclude that Google’s market power should not include YouTube or other properties”.